From digging low to getting high: Junior miners pivot to medical marijuana as commodities hit bottom prices
Prices of various precious metals have dropped, hitting junior miners. This prompted the junior miners to venture on various unconventional options, ranging from exporting eggs to farming medical marijuana.
There is a significant drop in prices of precious metals, including copper, iron ore, coal, and gold. This has stalled explorations and the junior miners are the ones to suffer the blow the most. These early stage miners depend on larger miners to acquire and develop the deposits they find.
But now, there is only limited demand for new sources of these precious metals. But transitioning to other new ventures away from mining is not new to smaller miners as this has been happening in the past during the dotcom boom in the 1990s. The real problem here is that if prices rebound, there will be less new mine prospects as junior miners are leaving the scene.
No one is interested in grassroots exploration projects at present, according to Yari Nieken, the chief executive of Chlormet Technologies, a junior mining firm that has transitioned to the e-cigarette business and medical marijuana farming.
As China opened for trading Wednesday, precious metals, including gold, platinum, and silver flashed crashed when a $2.7 billion notional in gold was sold. This led to a 4.2% or about $50 to just above $1,086/oz. This is the lowest it has been since March 10. The last time gold was down to $30 per ounce was in January 2014.
In 2014, Canada legalized the purchasing of marijuana, as long as it is from licensed producers and with a prescription from the doctor. Meanwhile, Regulator Health Canada predict Canadian medical marijuana to reach $987 million in ten years.
This is just one of the reasons why junior mining firms are transitioning from metals to marijuana. This is the same case as others that has jumped from mining to dining.